If you read NFT news often, you’ll come across a post about a scam from time to time. Unfortunately, any time a new industry is born, and that industry is met with high levels of demand, scams will happen, non-fungible tokens are no different. 

The good news is that you don’t have to be the next victim of a scam. While the industry is relatively new, there are several ways to go about protecting yourself when wading through the waters of the metaverse.

Well, if you’ve been concerned about scams, you’re in for a treat today. We had the opportunity to chat with Michael Thaang, one of the world’s leading experts on cryptocurrency and NFT security. Here’s how he says you should go about protecting yourself. 

Q. Is there any validity to external hardware wallets

A. Absolutely. Digital wallets, where your digital goods are held online have their place. However, as your wallet becomes more valuable, more attackers will want to get their hands on what you have. There are only so many layers of protection that online digital asset wallets can provide, and unfortunately, even the most popular wallets have been the center of scams. 

That’s why external hardware wallets like the Trezor Model T were invented. 

These wallets securely store your digital assets outside of the online world. Therefore, if someone wants access to your assets, they’ll have to go through you directly. 

Q. Have you heard about fake NFT store scams? If so, how do people avoid becoming the victim of these scams? 

A. Sure, fake stores are some of the most prevalent scams in the industry today. These online stores are usually designed to mimic the look and functionality of real, reputable online marketplaces like OpenSea. The difference is that when you buy something, you receive nothing in return or in some cases, a real NFT that’s worth pennies on the dollar compared to the price you paid for it. 

Avoiding these scams is a pretty simple process. 

First, only shop with reputable NFT marketplaces. OpenSea is the most reputable, but there are several others out there that are worth considering. Also, when shopping, take a moment to look at the address bar at the top of your page. Make sure the URL, or web address, is spelled correctly. Although con-artists may be able to mimic the look and feel of a website, they can’t copy a domain name. Pay close attention as they generally try to get domain names that are as close to the original as possible. For example, a con-artist that wants to copy OpenSea.io may use OpenSea.com, OpenSea.net, or even OpenCea.io. The difference is in the details and spotting that difference could save you a serious headache. 

Q. What about rug pulls? Do you have any tips for our readers on how to avoid them?

A. Rug pulls are essentially projects where money is raised and the creator of the project disappears after collecting hundreds of thousands or even millions of dollars for the sale of their artwork. Once the developer disappears, the value of the art plummets and investors lose a ton of money, but there is one way to protect yourself. 

You’ve got to do your research. 

Research provides a sturdy foundation for all wise investment decisions. With a little research, you’ll be able to see the validity of a project, how far along that project is, and whether or not it’s likely to become a rug pull. I recently read an article on the MMM website that outlined how to pick the best NFT projects to back. If your readers do the research in that article before buying into a project, chances are they’ll never be the victim of a rug pull. 

The article Michael Thaang referenced is available here.

Q. I’m sure you’ve heard of NFTs being given as gifts by members of Discord and other social media outlets, only to drain the wallet of the receiver. How do our readers avoid this kind of scam?

A. Yes, these scams are unfortunately prevalent at the moment. Yet again, the wise collector can completely avoid the scam. Doing so is as simple as not accepting any NFT gifts from anyone that you don’t know. 

Sure, if you’ve had discussions on Discord boards and become friends, it’s OK to gift NFTs back and forth. On the other hand, if some random person you’ve only chatted with for five minutes is trying to give you an NFT, back away, they could be trying to steal your collection. 

Q. Are there any other security tips you can give our readers to help them avoid scams?

A. Sure, one of the first things is to never use the same password for multiple accounts online. After all, if all of your passwords are the same and a hacker gets your information for your email address, they could be able to drain you of all you’ve got. Also, make sure the passwords you use are difficult to crack. Stay away from birthdays and pets names, and if you’re using a browser that will create a password for you, let it! These tend to be the most complex, difficult to hack passwords online. 

Also, keep your recovery phrase in a secure place in the real world. This phrase ultimately unlocks your wallet, and the person holding it, holds everything your wallet has to offer. So, it shouldn’t be held in the cloud or on an email. Instead, write it down and put it in a secure place, like your safe, or between your mattresses. 

Finally, you’ll want to update your software regularly. Software developers are constantly working to patch holes in their security they may not have been aware existed. These patches are released in updates. Always make sure all of your software is up to date to help protect your digital goods. 

Finally, avoid malicious Discord links. While not all links on Discord are malicious, the network has become a hotbed for malicious activity. Look at the link before clicking it. If it has been cloaked with a URL shortener or doesn’t seem familiar, avoid clicking it. 

These links are often sent by imposters, or con-artists that take on the persona of a real leader in the NFT space. Before clicking on any link, look into who’s sending it, paying attention to the details to ensure you’re not working with an imposter. 

The Bottom Line

The bottom line is that while scams do pop up in the NFT space from time to time, they’re largely avoidable. We’d like to take a moment to thank Michael Thaang for taking part in this interview and informing our reader on how they can avoid scams in the industry.